Who earns the interest on your stablecoins?

A stablecoin issuer takes your dollar and holds a dollar of reserves — typically cash and short-dated Treasury bills. Those reserves earn the prevailing rate. You receive nothing.

Across USDT's $183.3bn and USDC's $73.9bn alone, that is the interest on more than a quarter of a trillion dollars flowing to two companies. It is the single largest transfer of value in this industry, and it is almost never described as one.

The arithmetic is simple and it scales unpleasantly. Whatever short-dated Treasuries are yielding, that is your opportunity cost per year, every year, on the full balance.

For a $2,000 working balance moved in and out of trades, this is not worth thinking about. For $200,000 parked for eighteen months while someone waits for a better entry, it is a substantial and entirely avoidable sum.

You are buying something real: instant settlement, 24-hour availability, transferability across chains, and the ability to trade against almost any pair without touching a bank. For a working balance in an active trading account, forgoing the interest is a fair price for that.

The problem is that most large stablecoin balances are not working balances. They are savings that happen to be denominated in a token, held for months, earning nothing, at an issuer that can freeze them.

USDS is the notable large stablecoin that pays the holder — the mechanism passes a share of what the reserves earn back to the token rather than retaining all of it.

Beyond that, the honest comparison is not against another stablecoin. It is against a money-market fund or a Treasury bill, which pay you the interest, cannot be blacklisted by a company decision, and settle in a day or two rather than a minute. That trade — a day of settlement for the entire yield — is worth making for anything that is genuinely savings.

Several exchanges and DeFi protocols pay a yield on stablecoin deposits. That is a different product and carries different risk: the yield comes from lending your deposit to someone, and you are now exposed to that borrower, that platform and its liquidation machinery, not just to the issuer.

It can be a fair trade, and it should be priced as one. Compare the rate against a Treasury bill and ask what the spread is compensating you for — our lending rating works through where each protocol's yield actually comes from.

• Working balance for trading: a stablecoin is the right instrument, and the forgone interest is the price of the service.
• Savings held for months: use something that pays you, unless you specifically need on-chain settlement.
• Large balances either way: split across issuers, because every failure in this category has been issuer-specific.
• If you take a yield, know who is borrowing your money and what happens if they cannot repay.

If you are holding six figures of stablecoins for months, you are lending an issuer money at 0%.

Stablecoin issuers keep the interest on the reserves and holders receive nothing. That is a fair price for a working trading balance and a poor one for savings. USDS is the main exception; otherwise, for anything held for months, compare directly against a Treasury bill and take the yield.